Two SIPPs are better than one?

Why would someone have two Self Invested Personal Pension (SIPP) plans?

A client we met this week had two.

Both SIPPs held a commercial property as the main asset together with cash. One of the properties was subject to a mortgage on which the lender proposed to increase the interest rate because of an alleged breach of covenant (loan to value).

We discussed a possible solution. Amalgamate the two plans together by transferring the SIPP without the mortgage into the other SIPP in-specie (excuse my Latin)

Use the cash to part pay off the mortgage and then the rent received from both properties into the SIPP to accelerate the repayment of the mortgage.

Our plan demonstrated this could be done at reasonable cost and the mortgage paid off in just two and a half years. Just what the client wanted and no new product needed.

Now that’s financial planning.